Electronic Arts’ acquisition worth $55 billion is set to become the largest leveraged buyout in history, signaling a trend of private equity firms acquiring public companies, which could introduce more uncertainty to Canada’s gaming industry. The deal, announced on Monday, involves a consortium of buyers offering $210 per share to Electronic Arts’ stockholders. The acquiring parties comprise private equity firm Silver Lake Partners, Saudi Arabia’s sovereign wealth fund PIF, and Affinity Partners, a private equity firm led by Jared Kushner, who is the son-in-law of U.S. President Donald Trump.
Electronic Arts, known for popular video game titles like Madden NFL, Battlefield, and The Sims, has its origins in Canada, having acquired Burnaby-based game developer Distinctive Software in 1991 and rebranded it as Electronic Arts Canada. The studio, now known as EA Vancouver, has grown to about 2,400 employees in the Lower Mainland and is renowned for developing major franchises such as EA Sports FC soccer and NHL hockey games.
CEO Andrew Wilson expressed optimism about the future in a memo to employees, emphasizing the substantial investment being made in the entertainment industry through the acquisition. However, the deal, expected to be finalized in the first quarter of fiscal 2027, raises concerns for workers in an industry already grappling with layoffs amid the pandemic.
Bradly Shankar, a gaming editor at MobileSyrup, noted that while the gaming sector has witnessed significant acquisitions in the past, the scale and nature of this private equity takeover of EA are unprecedented. The fate of EA’s Canadian-made titles remains uncertain following the acquisition.
Post-acquisition, companies often undergo cost-cutting measures, including layoffs, but it is unclear if this will be the case for EA, which is taking on approximately $20 billion in debt for the transaction. Despite recent layoffs in 2024, EA has not provided any official statement on the matter.
The involvement of PIF, Saudi Arabia’s sovereign wealth fund, in the acquisition represents an expansion of Saudi investments in the global gaming industry. According to Shankar, PIF’s existing stakes in various gaming companies indicate its growing influence in the sector. Human Rights Watch has raised concerns about PIF’s involvement, linking it to human rights abuses associated with Crown Prince Mohammed Bin Salman.
While EA continues to have a dedicated fan base, its annual revenues have shown limited growth over the past three fiscal years, fluctuating between $7.4 billion and $7.6 billion.
